Options Worth Considering No Matter What the Season

​Medicaid Planning and Long-Term Care Options for New Hampshire Families

​Greetings again, everyone!  This is my final summer offering, so I'm going to give you some morsels to chew on as you relax in the sun one more time before charging into Fall with your systems revitalized.  I've said some of this before, but we all forestall unpleasant decision-making, so here it comes again.

The cost of care for our loved ones [and ourselves] during our sunset years continues to be a troubling dilemma for many families, and with the upcoming cuts to Medicaid, the difficulty of qualifying and paying for care can only become more challenging.  That's compounded by the fact that while we're generally living longer, we're not necessarily prepared for the additional costs of the care that those additional years may bring with them.   So, here are some ideas worth considering, based at least upon the current landscape of Medicaid eligibility.

Of course, the low hanging fruit about medical care is to keep ourselves in as good shape as we can for as long as we can.  If we don't need professional care until very near our last mortal moments, the costs will be minimized, both financially and in relation to the burdens on our families.  One threshold factor is that once our legs give out and our mobility is significantly reduced, the level and cost of the care we need are exponentially increased.  That was true for my mother, so I know whereof I speak. 

If we're still young enough (under 60 is best, but definitely under 70) and can afford it, long-term care insurance remains a meaningful safety net.  But definitely consider the hybrid plans now available, which often provide for life insurance payouts equal to the premiums we've paid for unused benefits.  This is specialized coverage, though, so make sure you review the options with an agent who knows the entire available marketplace.

If buying more insurance just isn't your thing, however, consider setting up an irrevocable trust (that won't be counted toward Medicaid eligibility) and funding it with an existing life insurance policy that will pay off at your passing and help replace the assets that may have been spent on your care during those final years.  If you don't have (or don't want to pay for) a policy to use for this purpose, you could either fund such a trust with other assets you may not need for support, or you could simply pay into the trust the periodic amounts you might have spent on long-term care premiums, so you'll know those funds will eventually return to the family once you're gone.

But if you do need care, you might also minimize the bite by staying in your home as long as possible (you want that anyhow, right?) and getting just the care you actually need - that is, not paying the significant costs of 24/7 help.  So, maybe just for shopping, laundry, meals, medical appointments, or whatever, but not for all day and night assistance.  

And if you've got a family member who might be able to provide that assistance - say, a grandchild who needs a place to live anyhow - you can enter into written caregiver agreements with them, to provide for their specific services at defined rates of pay (with accurate records kept, of course), so those funds will also stay in the family and won't be considered gifts that would be counted against you if you eventually do need to apply for Medicaid. 

Finally, many people's primary asset is the value of their home and they want to preserve that at all cost.  If you're married and your spouse is healthy enough to stay at home, your spouse can retain it, you can qualify for Medicaid without having to sell the home - and its value won't undermine your eligibility.  Even without a spouse, if you have a child who's been living with you for at least two years and has enabled you to avoid nursing home care for that long, you can transfer the home to the child and that transfer also won't be considered a disqualifying event for Medicaid.  

And if neither of those options will work to protect your home, you can transfer it to your children and enter into an arms-length lease (with market rent payments) to stay there as long as you can or want.  Then, once the "lookback" period for prior transfers passes (currently 5 years), the home's value won't be counted toward Medicaid qualification. 

There are other more complicated options, as well, but my fingers are tired and the dock at Lake Winnipesaukee is looking pretty appealing.  So, let's hope these comments and options are strictly hypothetical and unnecessary; that we can pass them on to others who may not be quite as fortunate; and that we'll all be healthy as horses until the final whinny.